Slowing economy forces immigration cut

Australia will cut its annual immigration intake for the first time in eight years due to the slowing economy and weakening demand for labour, Immigration Minister Chris Evans said today.

Australia is a nation of immigrants and has been enjoying a boom in new arrivals for the past decade to help meet labour shortages as a China-fuelled mining boom drove unemployment rates to 30-year lows.

But six of Australia's major trading partners are now in recession, economic growth has stalled, and unemployment has started to rise with the government expecting unemployment to hit 7% by mid-2010 from 4.8% currently.

"I expect the numbers of our programme to drop next year ... as a reaction to the economic circumstances," Evans told reporters.

"It is fair to say that we expect the demand in the economy for labour to reduce. As it is a program very much linked to the demand for labour, we expect to run a smaller program."

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Australia has been accepting immigrants in record numbers in recent years and set a target for 190,300 immigrants this year, up 20% on the 2007-08 financial year and higher than the post world war II record of 185,099 in 1969-70.

About one in four of Australia's 21 million people were born overseas, and Australia has been actively trying to attract skilled workers, with immigration fairs targetting university graduates and people with trades in Europe, Britain and India.

At the same time, Australia has begun a trial program to bring in thousands of seasonal workers from Pacific islands nations to help farmers pick fruit crops in country areas that have suffered acute labour shortages.

Australia's planned immigration intake has increased every year since 1997, although the number actually settling in Australia fell by about 20,000 in 2001-02.

Evans said the final number of immigrants that Australia would accept has yet to be determined. The government would decide that in the lead-up to the national budget to be delivered on May 12.

But he said the government would continue to target immigrants with skills for sectors where there is continued high demand, including the nursing and health sectors.

"We've been focused very much at the high-skill end over the years, and we will continue to be focused on the skills we need," he said.

Evans said about half of the skilled settlers in Australia come as temporary workers and then decide to stay permanently.

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Australia has accepted nearly 7 million immigrants since the end of World War II.